Nokia announced on Tuesday that it had entered into an agreement with Apple ending a lengthy legal battle between the two corporations, with both companies agreeing to withdraw their complaints to the International Trade Commission.

Nokia, the world's largest smartphone maker since 1996, issued a press release early Tuesday announcing the signed patent license agreement with Apple.

"The agreement will result in settlement of all patent litigation between the companies, including the withdrawal by Nokia and Apple of their respective complaints to the US International Trade Commission," the statement read.

As part of the agreement, Apple will make a one-time payment to Nokia, in addition to on-going royalties. The specific details of the agreement remain confidential. AppleInsider has reached out to Apple for comment, but has yet to hear back.

"We are very pleased to have Apple join the growing number of Nokia licensees," said Nokia CEO Stephen Elop. "This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."

In the statement, Nokia pointed out that it has invested approximately EUR 43 billion in research and development over the last 20 years, building up a patent portfolio with over 10,000 patent families. The agreement is expected to have a "positive financial impact" on Nokia's quarterly earnings.

Legal pundit Florian Mueller viewed the settlement as a favorable outcome for Apple shareholders, despite the fact that Apple has to pay. According to Mueller, the agreement comes as a "sweet defeat" for Apple because competitors building Android-based devices will also likely have to pay Nokia, possibly paying more per-unit because rival handset makers may have less intellectual property to use as bargaining chips.

"So from a competitive point of view, I don't think Apple loses much. On the bottom line its profitability may even benefit from this because Apple's margins face no greater threat than Android-style commoditization of smartphone technologies," Mueller said.

The two companies became entangled in a legal dispute in 2009 when Nokia sued Apple alleging infringement of ten wireless technology related patents. At the time, the case was characterized as a battle between "two Goliaths" and was expected to last for years.

Since 2009, the two companies have continued to trade lawsuits. Most recently, the ITC ruled that it would conduct a review of two patents in Nokia's infringement case against Apple, while dropping three patents from the investigation. Apple's case against Nokia with the ITC had been due to be decided on June 24.

The Finnish handset maker is currently undergoing a transitional phase from its Symbian platform to Microsoft's Windows Phone. Microsoft is reportedly paying Nokia billions of dollars to make the switch.

"Nokia and Microsoft will combine our strengths to deliver an ecosystem with unrivaled global reach and scale. It's now a three-horse race," said Elop, referring to rivals Apple and Google.

Some analysts believe, however, that Apple has a golden opportunity while Nokia readies its first Windows Phone devices. Mike Abramsky of RBC Capital Markets believes the Nokia-Microsoft partnership may actually accelerate share gains for Apple.

Though Nokia has long held the crown as the top global smartphone maker, a recent prediction from a Japanese market analysis firm sees Samsung and Apple overtaking the company by the end of this quarter. Earlier this year, Apple surpassed Nokia to become the world's largest mobile phone maker in terms of revenue.

The big question now is will Nokia make more money in 2015 from the sale of windows phones or from royalties from iPhone / iPad sales?

Quote:

"We are very pleased to have Apple join the growing number of Nokia licensees," said Nokia CEO Stephen Elop. "This settlement demonstrates Nokia's industry leading patent portfolio and enables us to focus on further licensing opportunities in the mobile communications market."

And of course, which company will Nokia go after next. My guess is HTC because they are on track to sell over 40 million smartphones this calendar year.

Apple always recognised that they needed to pay Nokia for these licenses (they are mainly to do with mobile phone technology Nokia developed with others well before Apple got into phones). The dispute was over the terms. Nokia were demanding larger royalties from Apple than from other manufacturers, so Apple threw their own patents back at Nokia. Now they've finally agreed terms, terms we'll probably never know.

The dispute was over the terms. Nokia were demanding larger royalties from Apple than from other manufacturers.

Again, like so many times before: Said who? Apple said so, Nokia denied. Unless the papers become public, we will never know.

Just because Apple thinks terms are not fair doesn't meant they aren't fair. It may be that Apple just felt that way. Fair you see is often a pretty subjective term especially if you've never licenced on F/RAND terms before.

Apple always recognised that they needed to pay Nokia for these licenses (they are mainly to do with mobile phone technology Nokia developed with others well before Apple got into phones). The dispute was over the terms. Nokia were demanding larger royalties from Apple than from other manufacturers, so Apple threw their own patents back at Nokia. Now they've finally agreed terms, terms we'll probably never know.

Quote:

Originally Posted by Gwydion

That's what Apple said, do you know how much other companies pay and what Apple was asked to pay?

What Apple said was that Nokia wanted cross licensing. Meaning they were welling to license their standard technology to Apple if Apple license back some of their nonstandard IP.

But now Nokia are not going to use their own OS for their smartphones. So Apple's IP are not that much important. Money is.

I believe (without spending an inordinate amount of time digging out the original articles) that the problem was the Apple knew that they needed to license these patents from Nokia, but that Nokia were allegedly legally obliged to offer these patents for licensing on an impartial basis (there was a phrase that I cannot bring to mind, "non __something (Began with a c?)__") which they were unwilling to do, instead requiring Apple to cross license their own patents in order to be allowed access to Nokias. This was the argument, that Apple be allowed to license them in the same way as anyone else was able to to without prejudice. Chances are that they have probably agreed to do exactly that, and have dropped the costly handbags at dawn.

There was never a doubt that Apple would pay, just the matter of on what terms. And it's not a case of Nokia going after Apple, or going after anyone else next, everyone in the mobile industry licenses them from Nokia already, Apple was just the newest without an existing agreement and Nokia tried to strongarm them into paying unfair terms.

Edit - the term I was looking for was non-discrimitory, and Nokia weren;t after cross licensing, they were after a royalty fee, they just tossed their own patents into question as a bargaining tool - see relpy later

The right thing to do. Good for both parties in my opinion. Nokia doesn't need the fight, they have enough on their plate. As for Apple, well, if you've used their IP, then you need a license, that's the way it works.

The below taken from the original article. Apple want to license the Nokia patents on a fair and reasonable non-discrimitary basis, Nokia try to gouge a couple of percent royalty in iPhones as part of the terms:

"The complaint alleges that these patents are essential to one or more of the GSM, UMTS and 802.11 wireless communication standards, and that the Company has the right to license these patents from plaintiff on fair, reasonable, and non-descriminatory ("FRAND") terms and conditions," Apple said. "Plaintiff seeks unspecified FRAND compensation and other relief. The Company's response to the complaint is not yet due. The Company intends to defend the case vigorously."

Analyst Gene Munster with Piper Jaffray said he believes that Nokia seeks a 1 percent to 2 percent royalty on every iPhone sold, which would amount to $6 to $12 per phone. Nokia's patents are related to GSM, 3G and Wi-Fi, and cover wireless data, speech coding, security and encryption. Nokia has alleged that all iPhone models released since 2007 infringe on these patents

The below taken from the original article. Apple want to license the Nokia patents on a fair and reasonable non-discrimitary basis, Nokia try to gouge a couple of percent royalty in iPhones as part of the terms:

Well, we can go on the assumption that they were either telling the truth, or they were lieing out of their ass.

As to which is more probably, we can't know for sure, but we can judge for ourselves by the comments and reactions of the parties involved.

Nokia sued, but made no comments about what they were sueing for, or why.
Apple replied, providing details of why they would contest the lawsuit.

Straightaway I am thinking what have Nokia got to hide. Apple are normally the ones with the closed doors, so why are they prepared to lay out their defense in the open, when Nokia didn't layout their claim.

Moving on to today, and terms are agreed. Apple say nothing, which is like there normal operating mode, and Nokia...say nothing. If they had got anything out of this other than the minimum, there would be some sort of comment, surely?

I can't prove anything, but just the tone of the complaint and the behaviour by both sides suggests to be like a mutual back down, and I would be willing to bet that they have licenses the patents on a FRAND basis without having to pay additional royalties which would be showing up on both companies public accounting books sooner or later.

If I had a complaint, I would make sure everyone knew what it was, not just sit meekly behind the lawsuit while the defendent made public claims challenging me. Unless I was trying it on as a means to and end. And if I then "won" the argument, even by means out an out of court settlement, I'd be crowing about it.

So, just common sense really. I don't see why there has to be some mysterious ulterior thing going on.

Step 2 - design then next iOS devices so that they do NOT use the parts or components etc that are subject to Nokia's patents and then stop making those payments.

Not sure how difficult that would be but it seems that the legal wrangling may have been partly to get a clear idea of exactly what Nokia's patents covered and what they don't - so that those items can be designed out of Apple products in the future.

Step 2 - design then next iOS devices so that they do NOT use the parts or components etc that are subject to Nokia's patents and then stop making those payments.

Not sure how difficult that would be but it seems that the legal wrangling may have been partly to get a clear idea of exactly what Nokia's patents covered and what they don't - so that those items can be designed out of Apple products in the future.

That would be impossible. Nokia own large chunks of patents that are core to GSM in the way that Qualcomm own chunks of patents that are core to CDMA. Short of Apple inventing an entirely new handset transmission system, which simply isn't a good use of their time, they will continue to pay Nokia for the length of the patents' lives.

No it wasn't. He implied that Apple's patents were more important than Nokia's, which clearly they are not.

There's a fundamental difference between Apple's IP and Nokia's, which is that Nokia's were mostly included into international standards - such as GSM, UMTS, Wi-Fi etc. As a result Nokia is under far greater constraints as to licensing terms than Apple is.

They have to license their patents under Fair Reasonable and Non Discriminatory terms (FRAND). The legal issue was, what exactly constitutes Fair, Reasonable and Non Discriminatory.

TL/DR? We don't know how much Nokia were asking but given that Apple didn't have a large warchest of similar patents that Nokia had to license under FRAND terms it's reasonable to assume they were asking more than Apple wanted to pay. The fact that they have settled so early would seem to indicate that somebody blinked - though as to who is anybody's guess.